Sustainable Diversion Limit (SDL) adjustment mechanism

​​The Murray Darling Basin Plan’s (the Basin Plan) Sustainable Diversion Limit (SDL) adjustment mechanism enables the Basin-wide SDL for surface water (10,873 GL per year) to be changed up or down by no more than 5%, as long as environmental, social and economic outcomes are not compromised.

Other safeguards ensure no change to the reliability of supply for consumptive users and place limits on changes to environmental outcomes.

Sustainable Diversion Limits (SDLs)

The Basin Plan sets limits—known as Sustainable Diversion Limits (SDLs)—on the amount of water that can be taken out of the system for consumptive use, including for households, industry and farming.

The SDLs are set for each catchment and aquifer, as well as the Basin-wide scale. The SDLs reflect the 'environmentally sustainable level of take' in the Basin.

The Basin Plan allows for the Murray-Darling Basin Authority (MDBA) to make adjustments to the SDLs before 2019 through the SDL adjustment mechanism.

The SDLs begin on 1 July 2019 and will be given effect through State water resource plans. T he reduction in consumptive extraction is made through the Australian Government's Water Recovery Strategy.

SDLs are long-term averages

SDLs are not fixed amounts. Instead the SDLs represent limits on average water diversions over the long-term. The actual limits on water use will vary according to water availability in that year, in line with State water resource plans. This ensures sufficient flexibility to adapt with Australia's highly variable climatic conditions.

For example, under the Basin Plan, the Basin-wide long-term average limit on surface water use is 10,873 GL (billion litres) per year. In very dry (low inflow) conditions, or times when water storage levels are low, much less water will be available for use than 10,873 GL. In contrast, wet (high flow) conditions, or times when storages are full, may allow allocations to exceed 10,873 GL, providing that the long-term average annual use does not exceed 10,873 GL.

Why we have a SDL adjustment mechanism

During the development of the Basin Plan, Basin water ministers requested an adjustment mechanism be included to allow for better social, economic and environmental outcomes than would otherwise have been achieved.

The SDL adjustment mechanism is provided for in chapter 7 of the Basin Plan.

How the SDL adjustment mechanism for surface water works

Information on how the SDL adjustment mechanism for surface water is being implemented, including the roles of the MDBA and Basin governments, can be found in the joint government booklet on the SDL adjustment mechanism.

The way Basin governments are working together to implement the SDL adjustment mechanism for surface water is detailed in Schedule 1 of the Intergovernmental Agreement on water reform in the Murray-Darling Basin.

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How far has the SDL adjustment work program progressed?

On 22 April 2016 the Murray-Darling Basin Ministerial Council (the Ministerial Council) agreed to a package of supply, efficiency and constraint measures under the SDL adjustment mechanism and officials formally notified the MDBA of the agreed adjustment measures on 5 May 2016.

The full list of agreed SDL adjustment proposals is available from the MDBA website at: SDL adjustment proposals. This initial package of measures is known as the ‘first notification’. Basin jurisdictions are working to settle remaining issues with the business cases for these measures over the coming weeks.

Agreed supply, efficiency and constraint measures are required to be implemented by 2024.

On 22 April 2016 Basin Ministers also requested that the Commonwealth amend the Basin Plan to provide for a second SDL adjustment notification by 30 June 2017. A bill to give effect to these amendments was passed through the Commonwealth Parliament on 9 November 2016 and is available on the Federal Register of Legislation website. This enables Basin jurisdictions to develop new projects to further augment the benefits of the SDL adjustment mechanism for Basin communities. It also requires the MDBA to propose an adjustment to the Minister by 15 December 2017.

How and when will an SDL Adjustment take place?

The MDBA is currently undertaking extensive modelling of the package of notified measures and will propose adjustments to the SDLs. A draft of the proposed SDL adjustment will be published on the MDBA website in due course , prior to December 2017.

Further information on the role of the MDBA in making SDL adjustments is available on their website at: Surface water: Sustainable Diversion Limit (SDL) adjustment mechanism.

Which States are involved in the SDL adjustment work program?

South Australia, Victoria and New South Wales are participating in the SDL adjustment work program, and have prepared individual and joint proposals for supply and constraints measure projects. The Australian Government is continuing to consult with South Australia, Victoria and New South Wales and industry to finalise efficiency measure programs.

Further information on the way Basin governments are working together to implement the SDL adjustment mechanism is detailed in Schedule 1 of the Intergovernmental Agreement on water reform in the Murray-Darling Basin (the IGA).

A new schedule to this IGA is currently being drafted by Basin governments to direct the implementation of the agreed SDL adjustment package. The principles to guide the development of the new IGA schedule were agreed by the Ministerial Council on 22 April 2016 and are available on the MDBA website at Water ministers agree Basin Plan package.

How can local communities be involved?

Basin States have committed to consult relevant stakeholders in the finalisation of proposed measures.

When the draft proposed adjustment has been published, the MDBA will provide a further opportunity for public comment before the final adjustment is provided to the Commonwealth water minister for consideration.

What is the finish date?

All measures must be completed by 2024. Once the final outcomes from these measures are known, the MDBA will assess whether any further adjustments need to be made to the SDLs.

What does the SDL Adjustment Mechanism mean for water recovery in the Murray-Darling Basin?

The size of the remaining water recovery task is expected to reduce with the operation of the SDL adjustment mechanism, meaning more water will be available for production. The greater the supply contribution, the smaller the water recovery task.

The Commonwealth will consult with each state on its water recovery and, until the final SDL adjustment outcome is known, ensure that any further water recoveries are strategic and minimise the risk of over-recovery.

Funding for projects under the SDL adjustment mechanism

The Commonwealth has committed up to $1.3 billion to enable more efficient use of environmental water to reduce the water recovery from consumptive purposes while achieving equivalent environmental outcomes. This funding had been earmarked for water purchasing but will not be required to the extent that supply measures are implemented.

Funding will be made available for approved projects up to the market value of the water saved. Basin state governments have been provided with up to $34.5 million to develop business cases for supply measure projects.

The Australian Parliament has also made a special appropriation of $1.775 billion for a 10-year period from the 2014-15 financial year for:

  • efficiency measure projects to deliver additional environmental water ($1.575 billion currently allocated). The additional water can only be recovered in ways that ensure socio-economic outcomes for Basin communities are maintained or improved.
  • easing or removing constraints on the ability to deliver environmental water to the environmental assets of the Murray-Darling Basin ($200 million currently allocated). Basin state governments have been provided up to $5 million to develop business cases for constraints measure projects.
  • providing for payments to address any detrimental socio-economic impacts associated with these measures.

Council of Australian Governments (COAG) plan

At its meeting on 9 December 2016, COAG requested that the Ministerial Council provide a plan to COAG by April 2017 that provides a credible and balanced pathway to implement the Basin Plan package agreed in 2012, including:

  • supply measures to offset the Basin Plan water recovery target of 2,750 GL by 2019, using the SDL Adjustment Mechanism;
  • constraints measures to address impediments to delivering environmental water; and
  • efficiency measures to recover an additional 450 GL by 2024, consistent with the Basin Plan legal requirement to achieve neutral or improved socio-economic outcomes.

The Ministerial Council agreed the plan at their meeting on 17 March 2017. Through this plan, all Basin governments reconfirmed their ongoing support for the Basin Plan package agreed in 2012, and their commitment to continued cooperation in implementing the Basin Plan. The plan will be considered by COAG at their next meeting.

COAG also agreed that Murray-Darling Basin issues will be dealt with through a regular COAG side meeting of First Ministers of Basin jurisdictions.

Senate Estimates

The Government has established a special estimates to ensure increased scrutiny of Basin Plan implementation.

More information

To learn more about how the SDLs were determined, including more information on how the 'environmentally sustainable level of take' was determined, see the Murray-Darling Basin Authority's website.

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